Monday, April 1, 2013

DW Mother's Retirement Income Fund (March 2013)

Regular readers of my blog would know that my parents are super resistant to any form of stock investments. This is due to the horror stories reported during the Asian Financial Crisis in 1998/1999. Reports of investors committing suicides were splashed all across the front pages of tabloids. My parents were not involved in the stock market back then, but the tragic stories were firmly etched in their minds. The US sub-prime crisis in 2008/2009 served to reinforce their utter distaste of stocks. So, imagine the chaos that ensued when I told them I bought shares 3 years ago. I tried convincing them to follow my footsteps to no avail. Finally, 2 months ago, my Mom decided to let me manage around S$20k of her savings. The rest of her money is in fixed deposits from various banks. As for my Dad, he is still as stubborn as a mule. Sigh......

Three main reasons spurred my Mom to change her mentality. Firstly, the banks are offering pathetically low interest rates. Secondly, she witnessed the steady stream of passive income flowing into my account. Lastly, the deal I gave her was too good to turn down. >_<"

I told her that the S$20k will be invested in quality income-generating blue-chips, companies that will not collapsed overnight. Furthermore, to put her mind at ease, I will also personally guarantee her principal capital. She would get to enjoy a flat 4% yield per year. On my end, I will just get the "left over" dividends as a token fee. The only restriction is that she must stay invested for at least 12 months. 

Company
Price
No. of lots
Mom’s yield
My yield
Singtel
3.52
3
4%
0.48%
Singpost
1.25
5
4%
1%
FCT
1.96
2
4%
0.89%

Yes, you read that right. Some of you may be thinking, "Wow! Personal guarantee! Still have 4% annual yield!" O_o"

Well, she is my Mom, so I want to put her mind at ease. Besides, S$20k is a manageable amount for me to guarantee as I have some savings. Promising her a 4% yield is not over-stretching. Of course, if my Mom puts S$20 million with me, there is no way I could possibly give any guarantees! 


Rock On,
Dividend Warrior

P.S.: I have replied all the comments in my previous post. ^^ 

20 comments:

Paul Chua said...

Sounds like insurance plan. >.<

test said...

Did you buy fct recently? $1.96?

Jay said...

Hi DW:

Great idea and good example how to contribute with your specific skills and interests to the family..

Your parents' attitude sounds very familiar! My dad got into stocks in the 90's, but the dot com crash left him permanently biased against stocks. Now he believes it's just a big casino and only gamblers and speculators would go there. I'm currently thinking of setting up a 'charity fund' with my siblings: invest a sum and the interest/dividend earned goes to a charity of their chosing.. Apart from the charity aspect, it might serve as an educational tool that you can actually generate an income from investing; just in time for them to realize that keeping a 1.8% FD is not the answer for their savings...

Your mom is a lucky mom to have you! ;-)

Jay

shanxing said...

4% yield? why not put into a fixed income bond fund @ 6% PA with monthly payout?

Less risk than equity. U can save on commission charges.

gads said...

Hi DW,
I wish to start investing and creating a portfolio like yours.
I have 50k to spare,
can you advise me on what platform i should use, and what i should invest in for dividend returns?
im 25 this year. please drop me an email at draggwong@gmail.com if possible. thank you!

SAFE said...

Hi,

just join, but always follow your post. quite good.

Do you consider adding Kep REIT in your portfolio? Thanks

SAFE said...

Hi,

just join, but always follow your post. quite good.

Do you consider adding Kep REIT in your portfolio? Thanks

Please reply to my email Eugene.sgp@gmail.com

SAFE said...

Hi DW,

Do you think it's time to buy Sabana (SSREIT)now? yield @ 7.1%, how about AIMS AMP REIT( 6.4%) and Cambrige REIT?

Thanks

Eugene.sgp@gmail.com

caleb Khoo said...
This comment has been removed by the author.
caleb Khoo said...

hi, do you think the price is bit high to get in now?

what is the reason you got in now for your mother?

Thought you got in most of your stocks after correction few years ago?

Dividend Chaser said...

Hi DW,

I am so touched how you helped mum with the 20K investment and giving her 4% yield and guaranteed capital return.

CreateWealth8888 said...

I have been offering to my MIL and SIL at fixed 3.3% p.a. with monthly payout for number of years. :-)

tan tantan said...

Hi dividend warrior,
What do you think of city spring infrastructure trust? The yield seems pretty consistent and high too. Plus it involved in utilities. Thanks for sharing.

gen said...

I am mid 20s. I have like 5k currently.
i like to do some investment, but i dont have any knowledge and passion in investment.Looking for one year investment which can bring me back some profit and easy to manage.
My investment goal is to make use of this 5k rather than putting it into the banks

Thank you

Newbie said...

Hi DW why dont u wait for us to start correction first, so far STI haven't start correction first I would rather wait for a technical correction in may/jun before start to purchase

jiaxu song said...

not counting CPF,

i have 250k in equity and 290k in cash

zero experience and exposure to reits...any tips?

gg to 35yo

Navin Jude said...

Hi DW,

I am 28, fresh to the investment world. I would like to invest for the first time. I have read your work and have been convinced by your expertise. I was wondering if i could get some advise from you?

Yours gratefully,
Jude
justa107@hotmail.com

wolfberries said...

Dear DW,

I'm newbie too.

Duno anything abt investments.

Hope you are able to guide me by emailing basic knowledge on what to read up?

Wish to have stock up for retirement savings.

wolfberries@gmail.com

Hope to hear frm you soon :)

Thank you

marrythaigirlsingapore said...

Interesting!

PETER W. said...

Well done.

We should all do something similar for our parents too!

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